claims: claim preclusion and issue preclusion. Claim preclusion is most
often called res judicata (or sometimes merger and bar), while issue
preclusion is most often called collateral estoppel.
In most situations, whether the facts are analyzed under the name of res
judicata or issue preclusion, the end result may be the same, but there
still is a considerable difference. The doctrine of res judicata
provides that a final judgment on the merits is conclusive upon the
parties in any later litigation involving the same cause of action.
Collateral estoppel applies when an issue of ultimate fact has been
determined by a final judgment, and that issue cannot again be litigated
between the same parties in a future lawsuit
Pipe and Piling Supplies (USA), Ltd v. Betterman & Kattelman, 8 Neb.
App. 475, 478-79, 596 N.W.2d 24, 28 (1999).
Res Judicata
The doctrine of res judicata provides that a final judgment on the
merits is conclusive upon the parties in any later litigation involving
the same cause of action. Kerndt v. Ronan,
<http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=595&FindType
=Y&SerialNum=1990121648> 236 Neb. 26, 458 N.W.2d 466 (1990)
<http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=595&FindType
=Y&SerialNum=1990121648> . The real issue is what is the cause or causes
of action involved in the disputes between the parties in both cases?
Pipe and Piling Supplies (USA), Ltd. v. Betterman & Kattelman, 8 Neb.
App. 475, 479, 596 N.W.2d 24, 29 (1999) citing Swift v. Dairyland Ins.
Co.,
<http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=595&FindType
=Y&SerialNum=1996112898> 250 Neb. 31, 547 N.W.2d 147 (1996)
<http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=595&FindType
=Y&SerialNum=1996112898> , "Res judicata is not available when the cause
of action in the original action is different from the current cause of
action." Id.
In Schuelke v. Wilson, 255 Neb. 726, 733, 587 N.W.2d 369,
375 (1998), the Nebraska Supreme Court ruled that res judicata does not
apply if the trial court does not render findings of fact or conclusions
of law on the issue alleged to be barred:
In the first trial, which culminated in our ruling in Schuelke, supra,
neither the trial court nor this court rendered findings of fact or
conclusions of law pertaining to the merits of Wilson's counterclaim
raising Schuelke's alleged breach of the promissory notes or of the
merits of Schuelke's affirmative defense thereto. Neither Wilson's
counterclaim nor Schuelke's affirmative defenses are res judicata. The
elements of proof in Schuelke's initial claim against Wilson for
rescission based upon fraudulent misrepresentation and Wilson's
counterclaim against Schuelke for breach of contract are not the same,
and claim preclusion was properly not invoked by the trial court upon
remand to bar Schuelke's presentation of evidence in support of his
affirmative defense to Wilson's counterclaim alleging default on the
notes. See, e.g., Lincoln Lumber Co. v. Fowler, 248 Neb. 221, 533 N.W.2d
898 (1995) (holding that where elements of proof differ between causes,
judgment in one action may, but does not necessarily, preclude judgment
in another, factually related action).
Mischke v. Mischke, 253 Neb. 439, 449, 571 N.W.2d 248, 257 (1997) is on
point here:
The issue of the value of personal property is not res judicata because
the parties did not stipulate to the value of the property in the first
proceeding. Furthermore, the purpose of the first proceeding was not to
determine the value of the property. Rather, it was an action to
determine ownership of the property and to compel the appellees to give
an accounting. Thus, the value of personal property was not an issue
either actually litigated or that could have been litigated in the first
proceeding.
Thus the doctrine of res judicata does not bar parties from bringing
related, but different causes of action.
Collateral Estoppel
The doctrine of collateral estoppel "recognizes that limits
on litigation are desirable, but a person should not be denied a day in
court unfairly." Gottsch v. Bank of Stapleton, 235 Neb. 816, 837, 458
N.W.2d 443, 457 (1990) (quoting Vincent v. Peter Pan Bakers, Inc., 182
Neb. 206, 207, 153 N.W.2d 849 (1967)). Four conditions must exist in
order for the doctrine of collateral estoppel to apply: (1) The
identical issue was decided in the prior action, (2) there was a
judgment on the merits which was final, (3) the party against whom the
rule is applied was a party or in privity with a party to the prior
action, and (4) there was an opportunity to fully and fairly litigate
the issue in the action. Bisgard v. Johnson, 3 Neb. App. 198, 525 N.W.2d
225 (1994). Collateral estoppel cannot, however, be applied to bar the
claims asserted by persons who have not had their day in court.
Due process requires that the rule of collateral estoppel operate only
against persons who have had their day in court either as a party to a
prior suit or as a privy; and, where not so, that at least the presently
asserted interest was adequately represented in the prior trial.
Gottsch, 235 Neb. at 837, 458 N.W.2d at 457 (quoting Hickman v.
Southwest Dairy Suppliers, Inc., 194 Neb. 17, 28-29, 230 N.W.2d 99, 106
(1975); Borland v. Gillespie, 206 Neb. 191, 292 N.W.2d 26 (1980)).
In JED Construction Co. v. Lilly, 208 Neb. 607, 305 N.W.2d 1
(1981) the Court stated that "the party against whom the rule is to be
applied was a party or in privity with a party to the prior action" is a
requirement of collateral estoppel. Id. The Lilly Court explained that
there is no need for both the plaintiff and the defendant to be the same
parties, as long as the party to be bound was a party to the previous
action. Id. at 611, 305 N.W.2d at 3-4.
The rule in Nebraska is that the same party against whom
preclusion is sought must have been involved in the prior action.
Cunningham v. Prime Mover, Inc., 252 Neb. 899, 903, 567 N.W.2d 178, 181
(1997) (quoting Kopecky v. National Farms, Inc., 244 Neb. 846, 854, 510
N.W.2d 41, 48 (1994)). For example, Gottsch v. Bank of Stapleton, 235
Neb. 816, 458 N.W.2d 443 (1990), involved an action to impose a
constructive trust on the proceeds from the sale of cattle purchased
from Gottsch by the Churchills. In a prior action, Gottsch obtained
judgment against the Churchills for the purchase price of the cattle.
In the Bank of Stapleton case Gottsch sought to impose a constructive
trust on proceeds from the sale of those cattle that were received by
the a defendant/bank as payments on notes owed by the Churchills. The
Supreme Court held that the doctrine of collateral estoppel did not
apply, even though the Churchills had litigated and lost the earlier
collection case brought by Gottsch. Discussing the requirement of
privity, the Supreme Court noted that:
"Privity depends upon the relation of the parties to the subject-matter,
rather than their activity in a suit relating to it after the event....
"Privity implies a relationship by succession or representation between
the party to the second action and the party to the prior action in
respect to the right adjudicated in the first action."
. . . . Privity has also been defined as [m]utual or successive
relationship to the same rights of property. In its broadest sense,
"privity" is defined as mutual or successive relationships to the same
right of property, or such an identification of interest of one person
with another as to represent the same legal right.... Derivative
interest founded on, or growing out of, contract, connection, or bond of
union between parties; mutuality of interest.
Id. at 838, 458 N.W.2d at 457 (citations omitted).
The Supreme Court noted that "the mere fact that litigants
in different cases are interested in the same question or desire to
prove or disprove the same fact or set of facts is not a basis for
privity between the litigants." Id. at 839, 458 N.W.2d at 458 (citations
omitted). The Supreme Court concluded that the issue tried in the
collection case against the Churchills was for a personal judgment and
did not involve the issue of title to the cattle. The bank was not,
therefore, in privity with Churchills and could litigate the issue of
the ownership of the cattle.
Jeanelle R. Lust
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